The market was hungry for a blowout quarter from the networking equipment specialist, but it didn’t receive one.
Cisco Systems (CSCO -1.61%) wasn’t a particularly popular tech stock on Thursday. Investors sold out of the stock following a quarterly earnings report that some found dissatisfying. This sank the share price by more than 1% on a day when the S&P 500 index basically traded flat.
Two slight beats
Cisco unveiled its fiscal fourth-quarter and full-year 2025 results just after market close on Wednesday. These revealed that the storied computer networking company managed to boost its revenue by 8% year over year in the former period to $14.67 billion. That was slightly above the consensus analyst estimate of $14.62 billion.
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Cisco attributed this to growth in overall product orders, which it said was 7% across all its regions. It also flagged artificial intelligence (AI) infrastructure products as growth drivers. In the first half of this calendar year, orders for such products topped $2 billion. This is double — and then some — management’s target of $1 billion for the period.
On the bottom line, non-GAAP (adjusted) net income landed at $4 billion, shaking out to $0.99 per share. That was 12% higher than the result for the fourth quarter of 2024, and it edged past the average pundit projection of $0.98.
Unsurprising guidance
Cisco also proffered guidance for its current (first) quarter and the entirety of fiscal 2026. It’s modeling $59 billion to $60 billion in revenue and adjusted earnings per share of $4.00 to $4.06. This is in line with the consensus analyst expectations of, respectively, $59.5 billion and $4.03.
While Cisco’s quarterly performance certainly wasn’t bad, it seems investors were expecting more convincing beats and higher guidance, particularly given that AI tailwind.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cisco Systems. The Motley Fool has a disclosure policy.
